SERPS

The State Earnings Related Pension Scheme (SERPS) is an Additional State Pension scheme (also known as Second State Pension or State Pension Top Up). It was designed to be a top up to the basic State Pension based on your earnings over your working life.

What is SERPS?

SERPS is a government-run Additional State Pension scheme. If you qualify for SERPS you could increase your retirement income. It applies to the following age groups:

  • Men born before 6 April 1951

  • Women born before 6 April 1953

If you qualify, you should automatically receive this money unless you’ve opted for what’s known as ‘contracting out’.

How much do I get with SERPS?

The amount you’ll get varies depending on the following:

  • The amount of years you’ve paid full National Insurance on earnings

  • Whether or not you’ve contracted out of the scheme

  • If you topped up your basic State Pension (only possible between 12 October 2015 and 5 April 2017)

The maximum amount you can get in 2019/20 is £176.41 a week (not including the State Pension top-up).

SERPS is paid directly into your bank account as an additional State Pension along with your basic State Pension.

How do I qualify?

You can only qualify for the additional State Pension if you reached the State Pension age before 6 April 2016. If you reached State Pension age any time after this, you would instead receive the new State Pension.

You can usually qualify if you were in full-time employment (apart from if you’re self-employed) between the years 1978 - 2002 and weren’t part of any company pension scheme or personal pension plan.

For any years in employment after 2002, SERPS changed to the Second State Pension (S2P) which was designed to help those unable to work or on low incomes. To qualify, the above criteria still applied, as long as you were earning at least the lower earnings limit or claiming carer’s allowance, disability-related benefits or child benefit.

What is ‘contracting out’?

If you are or were part of a personal or company pension scheme it’s probable that you were ‘contracted out’ of SERPS also known as the additional State Pension. This is because you would have paid lower National Insurance contributions in return for you or your employer paying the extra directly into this other scheme.

‘Contracting out’ means your eventual State Pension payout will be reduced, as you need 30 years working and paying full National Insurance contributions to qualify for the maximum amount you’re entitled to.

You can check if you were contracted out by checking your old payslips or calling your pension provider(s).

If you were contracted out before 6 April 2016, you’ll no longer be contracted out – you will instead pay more National Insurance (the standard amount).

How do I apply for SERPS?

You don’t have to apply for SERPS, you should automatically get it when you claim your State Pension. The Pension Service should then write to you after your claim to let you know how much you’re entitled to.

Risk warning

The information in this article should not be regarded as financial advice.

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